When setting up a short-term loan, most lenders will ask you to set up a recurring payment (also known as a continuous payment authority or CPA). This lets them take what you owe directly from your bank account on the repayment date.
This can be handy, but you’ll need to make sure you have enough money in your account to cover it – and any other bill payments, such as heating, mortgage or rent. If it takes you over your overdraft limit it could lead to bank charges.
You can ask your lender to cancel a CPA at any time – National Debtline has a letter templateOpens in a new window you can use. If your lender won’t help, ask your bank to cancel instead.
Either way, you’ll still need to repay your loan in another way. If you’re cancelling because of difficulties paying back the money, tell the lender as soon as possible and ask if they can give you more time to pay.